TIME CONTEXT: May 1993
POINT OF VIEW: Mr. A. John Chappell
President and Representative Director
Levi Strauss Japan K.K. is faced with the dilemma of shrinkage of jeans market. It appeared that after two years of shrinkage (1990, 1991) the market contracted further in 1992. SECONDARY PROBLEMS:
1.Part of the shrinkage of the market can be attributed to the very selective way of choosing retail outlet and sales agents of Levi Strauss Japan K.K. 2. Another cause of market shrinkage is due to the specialization of competitors mainly on women’s jean that brought the industry to a stiff competition. 3.In the side of Japan government, another factor detrimental to the company’s market size is its imposed policy like lowering birth rate and demographic shift to older population which Levi Strauss needs to cope.
To increase market share of Levi Strauss Japan K.K. from 16% to 20% by the year 1995 and continuously produce quality products that never goes out of style.
AREAS OF CONSIDERATION:
1.Levi Strauss Japan K.K. has an established name in the jeans industry since it had been in operations last 1971. It has been known with its quality product that never goes out of style. 2.LSJ employed a similar strategy to Levi Strauss in the US emphasizing heavy advertising spending. Since 1976, LSJ spent approximately 6% of total sales on advertising compared to an industry average of 4%. 3.All domestically produced clothing was made by contracted factories producing only Levi Strauss products. Domestically-made jeans fit the Japanese bodies better, and partially contributed to LSJ’s success in the early years. 4.In order to build company loyalty, LSJ provided a complete educational system ranging from teaching new employees the importance of the customer to developing management skills. Furthermore, compensation was based on the employee’s job...